From complexities to the rules of thumb: towards optimisation in pricing decisions Online publication date: Thu, 28-May-2009
by Erkki K. Laitinen
International Journal of Applied Management Science (IJAMS), Vol. 1, No. 4, 2009
Abstract: This study is arguing that management would benefit in pricing decision from simple rules of thumb more than from complicated models. These rules are easy to use and they provide management with useful support to move towards optimisation and to diminish gap between theory and practice. This paper presents three kinds of rules for pricing decision dealing with multi-product pricing, dynamic pricing and pricing objective function. The rules are adjusted versions of the Amoroso-Robinson rule. The paper also presents survey evidence on pricing decisions in Finnish firms. This evidence is based on a questionnaire responded by 205 firms. Finnish firms tend to use cost-plus pricing and are largely full-cost adopters although many of them report maximising objectives for pricing. Evidence shows that the firms are able and motivated to apply analytical methods for pricing. However, only 22% of the firms have adopted optimisation models in pricing decisions.
Existing subscribers:
Go to Inderscience Online Journals to access the Full Text of this article.
If you are not a subscriber and you just want to read the full contents of this article, buy online access here.Complimentary Subscribers, Editors or Members of the Editorial Board of the International Journal of Applied Management Science (IJAMS):
Login with your Inderscience username and password:
Want to subscribe?
A subscription gives you complete access to all articles in the current issue, as well as to all articles in the previous three years (where applicable). See our Orders page to subscribe.
If you still need assistance, please email subs@inderscience.com
Our Blog 
Follow us on Twitter 
Visit us on Facebook